Friday, February 17, 2012

Brian Doherty responds to me: "While there may be some alternative I'm not seeing, are you saying toward the end of graf one that Keynesians belief that free markets NEVER create bad outcomes for which concerted government action are required as a remedy? If you've argued this point at greater length elsewhere, I'd be interested in seeing a link. If I'm misunderstanding what contrary to that statement of mine you are arguing, I'd be interested in elaboration."

Of course Keynesians think that markets can create bad outcomes. And of course Keynesians point to government action that could be beneficial. The problem is this view (which Doherty is not alone in promoting) that once the economy runs into problems Keynesians think "only concerted government action could pull them out" [that's from the original article]. This is the point that's patently untrue. I'm not sure what else there is to say about this, because Doherty hasn't even really explained why he thinks this is the Keynesian position in the first place. All I can say, then, is that it's never been the claim. Keynesianism points out how we can have a less-than-full employment equilibrium in market economies. If investment demand recovers, of course we can see a recovery of the economy without government. Who ever said we couldn't? We might be seeing some of that right now. The stimulus certainly slowed the downturn, but it's likely that the signs of recovery we're seeing now have little to do with govenrment policy at all.

I genuinely don't understand why some people insist on attributing bizarre arguments to the other side. How does that help. What good would it do me to say "Austrians hate poor people", and then waste my breath telling them why they shouldn't hate poor people. It would be entirely unproductive because it would entirely miss the mark. Why do people do this? I don't know.

8 comments:

Such remarks are not an attempt to have a conversation with the other side. They are an effort to rally the troops.

Look at Rothbard's History of Thought: how could anyone be convinced by his several page attack on Hegel when, if you check the biblio, it is clear he had never read a single book by Hegel, or even by an acknowledged Hegel scholar? No, the point of the attack is to give those already convinced ammo to use when someone critiques them by saying: "Well, as Hegel pointed out..."

The Rothbardian hears nothing else, and shouts back: "Hegel was a totalitarian state-worshipper!"

Same with Keynes. Doherty et al are not trying to talk to Keynesians: they are convincing other libertarians that there is no need to pay any attention to Keynesians.

Rallying the troops is one thing. The other thing is honest ignorance. There are a lot of people saying that Keynesianism reduces to "Government! Government! Rah-rah-sis-boom-bah!", so it's no wonder there are people who think that's actually true.

Likewise there are lots of people who treat Austrians like tin-foil wearing Scrooges. No surprise again that there are actually people who think that is true.

But I don't particularly like assume ignorance OR malevolence, so I feign ignorance on my own part.

Let me suggest that, since Wapshott's 100,000 word book, my 2200 word review of that book, and most short bloggy or magazine article discussions about the distinctions between Keynesian and Hayekian (or more broadly, leaning-toward-laissez-faire economics) are about the application of that economic thought to public or government policy, and since most (I'm guessing all, but I'll say most) of those policy duels are about those times when the application of Keynes-style thinking does lead to the conclusion that government action is warranted, that that's what "people do this." And that given that my sentence is, by your own admission, correct---that SOMETIMES Keynesians think that the economy ends up in a situation for which government action is necessary to pull it out--that is, those times when investment demand does NOT recover in a time frame seen as sufficiently quick---that at best in any atmosphere of intellectual charity (and I find Gene's comments pretty laughable in this particular context) you might say, well, Doherty's statement in a 2200 word review does not capture the entirety of Keynesian thought on this matter (even though it is the point relevant to the particular policy debate the book he's writing about is concerned with, and pretty much EVERY policy debate involving Keynsian v. Hayekian thought), rather than expressing (I'm guessing slightly feigned) shocked confusion that EVERYONE COULD BE SO BLIND AND STUPID as to associate Keynesian thought with the need for government action to solve economic problems. It would be as if I pretended not to understand why lots of quick popular discussions of Hayek tend to associate him with the idea that market equilibriums of value to the greatest number can and do arise freely, even though IN FACT there are some areas where Hayek did believe in government action to ameliorate problems that arise from free markets, and acting like I have no idea why people could be SO STUPID.

Still, I congratulate Gene and Dr. Kuehn for never deliberately misunderstanding their opponents comments in order to score points off of them. They would obviously never do such a thing.

re: "And that given that my sentence is, by your own admission, correct---that SOMETIMES Keynesians think that the economy ends up in a situation for which government action is necessary to pull it out..."

I can't think of a single situation - not a single one - where a Keynesian would say that increased government spending can accomplish what increased private investment can't. Not a single one. Of course government spending might be advisable, but that seems like a different point.

re: "that at best in any atmosphere of intellectual charity (and I find Gene's comments pretty laughable in this particular context) you might say, well, Doherty's statement in a 2200 word review does not capture the entirety of Keynesian thought on this matter"

What does length have to do with it? My blog post was even shorter than yours and I managed to write up in a couple sentences a more accurate version of Keynes. You only had a couple offending words after all. Word count has nothing to do with it, so let's just drop this one, OK?

re: "rather than expressing (I'm guessing slightly feigned) shocked confusion that EVERYONE COULD BE SO BLIND AND STUPID"

I'd appreciate it if you take this back. I said nothing of the sort.

re: "Still, I congratulate Gene and Dr. Kuehn for never deliberately misunderstanding their opponents comments in order to score points off of them. They would obviously never do such a thing."

I'm not sure what your game is here, Brian. Nobody's out to get you and I certainly haven't called you "stupid" or "blind". I regularly try to correct misconceptions of Keynes on this blog. It doesn't mean I'm badmouthing you if I take issue with some of your framing. I said it was a good review, did I not?

The point at issue in Wapshott's book, my review, and again pretty much ANY context in which any journalist is discussing Keynesian v. Hayekian thinking are those times when in their minds private investment is NOT accomplishing what they think needs to be accomplished. There actually really was a debate then, and now, over whether and when government action is needed, and the Keynesians and Hayekians really were on different sides of it. That's why people write things like what I wrote. And again, unless you are saying that Keynesians NEVER think government action is warranted to solve a problem that free markets got us into, then my statement is correct. And yes, word count is absolutely at issue, because I had a purpose in my short review---discussing Wapshott's book and the context in which Wapshott's book was discussing the policy distinctions between Keynes and Hayek for a lay audience expecting a somewhat complete discussion of the book in question. And thus there was no reason whatsoever, especially after including the word "sometimes," to go deeper into the idea that Keynes and Keynesians don't ALWAYS think government action is required to solve demand problems. You had a distinct purpose in your even shorter entry: to make readers think that I or people who associate Keynesian thought with the need for government action don't know what they are talking about. That's why you had the time to make the point you made in the words you made--because your purpose was distinct. Word lengths are relevant to purposes. I leave it as an exercise to the reader to decide whether your tone isn't fairly characterized as shock that people could be so dumb as to write that Keynesians sometimes think government action is warranted to solve economic problems.

If you didn't mean "only" then that's fine and you are correct. You wrote "only". What am I supposed to think?

I think you're making too much of this. All I'm saying here is that Keynes and Keynesians get presented as market skeptics, and you do that here. That's misleading. There was a disagreement. The disagreement was largely over what government could accomplish, though, and not over what markets could accomplish.

re: "You had a distinct purpose in your even shorter entry: to make readers think that I or people who associate Keynesian thought with the need for government action don't know what they are talking about."

I'm going to once again have to ask you to take this back. That absolutely wasn't my purpose.

I presume a lot of people who resort to shorthand of the sort presented in your article understand Keynes somewhat better than that. But the shorthand still influences public perceptions, so I try to highlight that.

I am not and I have not made you out to not know what you're talking about. I've made you out as writing a review that gives the wrong impression. I stand by that. I certainly don't think you're "blind and stupid" either. I'm not sure why you keep coming back to this.

I think we are differing on the meaning people can reasonably take from the word "only." And I do apologize if I have seemed intemperate behind the call of reality.

To me, if there is a circumstance in which private demand is NOT rising to the occasion keynesians think it must rise to, even though in theory it could, then in that circumstance it is fair to say that only government action is capable of solving the demand problem---because they other things that MIGHT HAVE solved it are not.

If in fact this is the crux of our disagreement, I think my use of the language indeed accurately describes the facts. I think a reader of your original comment would come to the conclusion that only a lay ninny would be so silly as to think that Keynesians ever think government action to solve demand problems (though I was not specific about discussing demand problems in my more general sentence) are warranted or needed. And I don't think that is true, and that that very question is at the heart of nearly every occasion when a lay policy discussion about Keynes is occurring, and why so many people make this mistake that seems to vex you so.